Client has not signed contract - where do I stand.

[crivensjings]

Hi,

All of the threads I can find relating to unsigned contracts seem to involve agencies.

I have been lucky enough to bypass agencies in my current contract which commenced 5 months ago and I issued the client with a standard 'specialist supplier' contract obtained via the Professional Contractor's Group.

My client has never signed and returned the contract despite being politely reminded to do so about two months ago. The client has paid my invoices (although rarely on time) so does this mean that in so-doing, they accept the terms of the contract?

Also, I have been notifed verbally that my contract will be terminated on 30th Sept but to date (14th Sept) I have not received the 30 days written notice required in the contract terms. Given that the client has not signed the contract, does this mean that I can't hold them to it?

Has anyone else had this experience and if so, how did you resolve it?

[SueEllen]

Yes the contract is accepted but they could try and argue rubbish like you broke terms or whatever.

To ensure there is no doubt about you leaving on 30th September create a paper trail yourself between them and your company i.e. send them a letter via recorded delivery stating the date that it's agreed that services will end. Also add some line about the date you expect all payments for services to be made by.

Then send your final invoice in as normal. I would send them two copies via email and post using recorded delivery so they can't say that they have lost it.

If they don't pay you with in the agreed time then invoke The late payment of commercial debts (interest) Act 1998 (Pay on Time ) followed by a threat of taking further action to recover the debt within 14 days. Then if it comes to it either get a debt collector involved or take court action.

[Wanderer]

Great advice from SueEllen.

I issued the client with a standard 'specialist supplier' contract obtained via the Professional Contractor's Group. My client has never signed and returned the contract. The client has paid my invoices (although rarely on time) so does this mean that in so-doing, they accept the terms of the contract?

To my understanding, yes. You have offered them a contract to supply the services, they then engaged you to supply the services and paid you so they have tacitly accepted your contract terms. I guess you now realise that you should not to start work without a signed contract though.

Also, I have been notifed verbally that my contract will be terminated on 30th Sept but to date (14th Sept) I have not received the 30 days written notice required in the contract terms. Given that the client has not signed the contract, does this mean that I can't hold them to it?

To be honest, if I was given 30 days notice verbally, then I'd be inclined to write to them confirming the leaving date and leave it at that rather than working to rule and billing them for days not worked (which will start a fight).

The late payments are another issue. You are well within your rights to pursue them for interest and a penalty for late payment as SueEllen suggests.

Those last two points hinge on one question: Will you come back and work for this client again (or use them as a referee) or are you happy to burn your bridges with them?

I would suggest that you don't burn your bridges unless you are really sure you know what you are doing. A big part of business is goodwill and sometimes building goodwill costs money, other times the client really messes you around. Depending on the scale of it, you often have to accept that it comes with the territory. However fed up I get with clients, I always try to leave on good terms, keep in touch and who knows, there may be other work come up they could recommend you to someone else.

[SueEllen]

If the client has been paying you late but consistently within 30 days of invoicing then don't burn your bridges as wanderer said.

However if they have been screwing you around completely i.e. you have to ask what's happen to your payments and you get mumbled an excuse, they are not worth doing business with again.

One issue with some managers/people who hire services in companies is that they are not always fully aware of the different ways their accounts department categorises outside suppliers. Ideally you should be able to communicate with the accounts department yourself to get clarity on their rules.

[crivensjings]

SueEllen and Wanderer,

Thank you both very much for your very helpful replies.

I don't intend to make a song-and-dance about the 30 days notice but it's useful for me to be clearer about my position in that regard as they've been a difficult bunch to deal with over the past few months.

It's tempting to pursue them for the late payment interest as it's cost me around £300 in bank charges over the past few months but I would prefer not to give them any reason to stall payment of my final invoice - I just can't afford for them to be late this time as I've nothing else lined-up.

Thanks again for your replies.

[Hex]

I wouldn't think the notice is particularly relevant anyway. If it's a PCG contract you've used then it will have clauses in ensuring there is no Mutuality of Obligation. If that's the case, then even if you insisted the contract ran for 30 days after you've been given written notice, then they would have no obligation to actually give you any work to do in that period and so the notice is not really relevant.